KARIM HOTEL PVT LTD vs KAREEM DHANANI

* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: 22nd February, 2024
Pronounced on: 06th March, 2024
+ CS(COMM) 112/2022 & I.A. 2695/2022
KARIM HOTEL PVT LTD ….. Plaintiff
Through: Mr. Darpan Wadhwa, Sr. Adv. with Ms. Divita Vyas, Mr. Amer Vaid, Mr. J.H. Jafri, Mr. Amique Khalid, Mr. Mohd. Affan, Ms. Vidhi Jain and Mr. Shahid Khan, Advs.
versus
KAREEM DHANANI ….. Defendant
Through: Mr. Rajshekhar Rao, Sr. Adv. with Mr. Vivek Singhi, Ms. Kriti Mewar, Mr. Harshil Wason and Mr. Yashraj Samant, Advs.
CORAM:
HON’BLE MR. JUSTICE ANISH DAYAL

ORDER
ANISH DAYAL, J.
1. This order deals with the issue of rejection of plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908 (“CPC”) which arose in the following context:
(i) Plaintiff filed the present suit claiming to be the proprietor of the trademarks “KARIM/KARIM’S/KAREEM” (word as well as device) and their trading name M/s. Karim Hotel Pvt. Ltd., of which the word ‘KARIM’ formed a prominent and essential feature. Plaintiff’s founder, Haji Karimuddin, opened the first Karim Restaurant in 1913 near Jama Masjid, Delhi. Over a period of time, they gained extensive reputation for their high-quality Mughlai food and the said restaurant became iconic.
(ii) Plaintiff obtained registrations in these marks, around 50 in number, in various classes including Classes 16, 29, 30, 42, 43. Plaintiff also used the domain name www.karimhoteldelhi.com. Plaintiff came to know of defendant’s use of the identical mark ‘KAREEM’S’ sometime in December 2014, and issued a legal notice in February 2015, which was responded to by defendant in March 2015.
(iii) Thereafter, plaintiff filed a suit being CS(OS) 1885/2015 (later renumbered as CS (COMM) 526/2016) titled “Karim Hotels Pvt. Ltd. v. Kareem A. Dhanani” against defendant (“previous suit”). Therein, defendant took a plea that it had a registration dated 04th February, 2005 for the device mark ‘KAREEM’S’ bearing No.1336349 in Class 42. Considering the said registration, plaintiff had filed a petition seeking cancellation of defendant’s mark before the Intellectual Property Appellate Board (“IPAB”), Mumbai (“the cancellation petition”).
(iv) Consequently, this Court vide order dated 17th February, 2016 in the previous suit, passed the following order:
“LA. No. 2316/2016
Issue notice. Learned counsel for the plaintiff accepts notice.
This application has been moved by the defendant under Section 124 of the Trade Marks Act, 1999 with the plea that the plaintiff has disclosed in paragraph 27 of the plaint that the plaintiff has already, i.e. prior to the filing of the suit, moved an application for removal of the defendant’s trade mark “KAREEM’S” (LOGO) registered under- No.1336349 in class 42 in the name of the defendant by moving an application under Sections 47/57/125 of the Trade Marks Act before the Intellectual Property Appellate Board (IPAB), Mumbai. The defence of the defendant in the suit is premised on Section 30(2)(e) of the Act, apart from other defences. In view of the aforesaid position, the suit is liable to be stayed.
Learned counsel for the plaintiff does not oppose the application.
Accordingly, the suit is staved and adjourned sine die to await the decision of the IPAB in the aforesaid rectification application.”

(emphasis added)
(v) Subsequently, while the cancellation petition was pending before IPAB, Mumbai, this Court passed the following order in the previous suit on 16th November, 2017:
“Present suit has been filed for permanent injunction to restrain infringement, passing off, delivery up, damages etc.
No injunction order has been passed by this Court in the present suit.
Admittedly, the plaintiff has filed a proceeding before the Intellectual Property Appellate Board (for short ‘IPAB’) for cancellation of the defendant’s mark. Present suit is being repeatedly adjourned since 17th February, 2016 to await the outcome of the IPAB.
This Court is of the opinion that no fruitful purpose would be served by repeatedly adjourning the present suit as not only the proceedings before the IPAB are bound to take time, but any order passed by the IPAB may be challenged by either of the parties.
Consequently, the present suit and pending applications are disposed of with liberty to the plaintiffs to file an appropriate proceeding after the IPAB has disposed of the proceeding for cancellation of the defendant’s mark and the said order has attained finality. The rights and contentions of all parties are left open.
Registry is also directed to issue to an authorized representative of the plaintiffs a certificate authorizing him/her to receive back from the Collector full amount of the Court fee paid by them in the present suit.”
(emphasis added)
(vi) The cancellation petition was transferred from IPAB, Mumbai (after abolition of IPAB in 2021) to the High Court of Bombay, and is since pending. In the meantime, this suit, being CS(COMM) 112/2022, was preferred by plaintiff, essentially urging that due to the long delay in disposal of the cancellation petition, defendant proceeded to expand their restaurant business, having more than 50 franchises in various cities and, therefore, sought restraint on the same.
(vii) This Court on 17th February, 2022 directed defendant to file a list of restaurants which were operating in the name of ‘KAREEM’S’. The said affidavit was eventually filed noting that they were running 41 restaurants, details of which were extracted in the order dated 27th May, 2022. By the same order, this Court traversed the pleadings and passed an order against defendant restraining them from opening any further restaurants under the mark “KARIM/KARIM’S/KAREEM/KAREEM’S”, or any other mark which was deceptively similar, after noting as under:
“13. This Court notes that this is the second round of litigation between the parties. A perusal of the record shows that the Plaintiff is the prior owner and user of the marks “KARIM/KARIM’S/KAREEM” for Mughlai food and North Indian delicacies, since the year 1913. The admitted adoption of the impugned mark by the Defendant is since 2003, which is almost 90 years after the Plaintiffs adoption. In the first round of litigation, the suit had been initially adjourned and thereafter, disposed of, permitting the Plaintiff to file proceedings after the IPD taking a decision in the cancellation petition. Unfortunately, however, the said cancellation petition has continued to remain pending and has not proceeded further. With the enactment of the Tribunals Reforms Act, 2021, the IPAB has also been abolished and thus the case would have to be transferred to the jurisdictional High Court. Ld. Counsel submits that the matter is yet to be listed and no notice of listing in a High Court has been received by the Plaintiff.
14. Considering the fact that the Plaintiff is the prior user, adopter and owner of the marks “KARIM/KARIM’S/KAREEM”, the continued use of the said mark by the Defendant would result in passing off and deception. However, the Defendant having opened 41 restaurants already as per the list set out above, this Court is of the opinion that a balance would have to be struck so as to ensure that neither party is prejudiced irreparably. Owing to the long adoption of the Plaintiff’s marks “KARIM/KARIM’S/KAREEM” and the goodwill and reputation which the Plaintiff’s restaurants enjoy, not only in India but internationally, this Court issues the following directions:
(i) The Defendant shall not open any further restaurants under the marks “KARIM/KARIM’S/KAREEM/KAREEM’S” or any other marks which are identical or deceptively similar to the Plaintiff’s marks “KARIM/KARIM’S/KAREEM” till the next date of hearing. The said order would extend to the Defendant as also any entity which may be promoted/incorporated by/associated with the Defendant or his family members.
(iii) The Defendant shall also ensure that in the restaurants run by him or by his franchises, no representation is made to the customers that the Defendant is associated with the Plaintiff-KARIM/KARIM’S/KAREEM Restaurant from Jama Masjid or Delhi.
(iv) In this regard, at least two public notices shall be issued in prominent newspapers having circulation in Maharashtra and in North India, that the Defendant’s restaurant KAREEM’S is not associated with the Plaintiff’s – KARIM HOTEL PVT LTD or KARIM/KARIM’S/KAREEM Restaurant from Jama Masjid or Delhi. The said notices shall be published by the next date.
(v) All the advertisements and promotional materials, menu cards, etc. including all promotions on social media and online platforms, shall carry a prominent disclaimer to the following effect:
“No connection with KARIM’S Jama Masjid/Delhi”.
(vi) The above inclusion of disclaimer be effected within two weeks in respect of all existing and future promotional materials.”
(emphasis added)

(viii) The order dated 16th November, 2017, disposing of CS(COMM) 526/2016, the previous suit, was not challenged by plaintiff and, therefore, would be considered final. The cancellation petition remains pending before the High Court of Bombay. In this context, the Predecessor Bench of this Court, on 24th March, 2023, expressed a concern as to whether plaintiff could be permitted to institute the present suit in violation of the order dated 16th November, 2017, in the previous suit. The said observation is extracted herein for reference:
“15. To my mind, it is questionable as to whether, on that ground, the plaintiff could have instituted the present suit. The reliefs sought in the earlier suit CS (Comm) 526/2016 were exactly the same as those which have been sought in the present suit. Once CS (Comm) 526/2016 was disposed of, it was not open to the plaintiff, prima facie, to institute a fresh suit for the same reliefs. Any such suit, if instituted, could only be in terms of the liberty granted by the Court while disposing of CS (Comm) 526/2016. That liberty allowed the plaintiff to re-approach the Court only after the proceedings in the IPAB attained finality. That order was never challenged by the plaintiff and was, therefore, accepted by it. The plaintiff cannot, prima facie, now seek to institute the present suit in violation of the order dated 16th November 2017, whereby CS (Comm) 526/2016 was disposed of.
16. In these circumstances, the plaintiff would be required to explain as to why the present suit should not be dismissed under Order VII Rule 11 of the CPC.
17. Let the plaintiff, therefore, show cause as to why the present suit be not dismissed under Order VII Rule 11 of the CPC, if necessary, by reserving liberty to the plaintiff to reapproach the Court at the appropriate stage in terms of the order dated 16th November 2017 passed in CS (Comm) 526/2016.”
(emphasis added)
(ix) Meanwhile, a transfer petition, being Transfer Petition Civil No. 2880/2022, was preferred in the Hon’ble Supreme Court by plaintiff seeking transfer of their cancellation petition pending in Bombay to this Court, to be heard along with the suit. However, since the issue of rejection of plaint under Order VII Rule 11 of CPC had already been triggered by this Court, the Hon’ble Supreme Court passed the following order on 15th May, 2023:
“It is stated that insofar as the suit filed by the petitioner in Delhi is concerned, the aspect of whether the plaint is liable to be rejected under Order VII Rule 11, CPC is to be taken up tomorrow. It is thus submitted that this transfer petition may be considered thereafter as if the plaint is rejected there is no ground for the transfer of the Bombay proceedings to Delhi but if the suit continues in Delhi, then that aspect is to be explored.
List in the first week of August, 2023.”
2. Accordingly, counsel for parties were heard on the issue of rejection of plaint under Order VII Rule 11 of CPC.
Submissions on behalf of Defendant
3. Mr. Rajshekhar Rao, Senior Counsel for defendant, in support of rejection of the plaint, submitted as under:
(i) That the order dated 16th November, 2017 in the previous suit was never challenged by plaintiff and has become final. The only option they had was to await the disposal of the cancellation petition.
(ii) Defendant did not exercise its right under Order XXIII Rule 3 of CPC, to withdraw with liberty to refile and, therefore, was estopped from instituting another suit. They were also estopped from doing so on application of the principle of estoppel under Section 115 of the Evidence Act, 1872.
(iii) As noted above, the application under Section 124 of the Trade Marks Act, 1999, being I.A. 2316/2016, had already been moved in the previous suit in which order dated 17th February, 2016 staying the suit had been passed. At that stage, no relief was pressed by plaintiff under Section 124(5) of the Trade Marks Act, 1999 and, therefore, the opportunity has been waived.
(iv) While disposing of the previous suit on 16th November, 2017, this Court did not grant an injunction in favour of plaintiff and the determination was, therefore, final.
(v) Despite these facts and circumstances, the Court on 27th May, 2022 passed an order of injunction precluding defendant from opening any further restaurants.
(vi) Both Order VII Rule 11(a) and Rule 11(b) of CPC are attracted as the present suit “does not disclose a cause of action” and is “barred by law”. Senior Counsel for defendant submitted that, using principles governing both Order XXIII Rule 3 and Order II Rule 2 of CPC, once plaintiff had an opportunity to raise a claim they ought to have done so or they should have withdrawn their previous suit with liberty to institute a fresh suit.
(vii) Plaintiff could not indulge in approbation and reprobation and there had to be a conclusion and finality to their relief for passing off, as pressed.
(viii) Reliance was placed on Bhargavi Constructions v. Kothakapu Muthyam Reddy, (2018) 13 SCC 480, to contend that “barred by any law” would also include judge made law. Reference was made to para 10 and 26. Accordingly, it was contended that the decision of 16th November, 2017 would, therefore, be covered under the phrase “barred by any law” in Order VII Rule 11(d) of CPC.
(ix) Reliance was also placed on the decision of the Hon’ble Supreme Court in Mumbai International Airport (P) Ltd. v. Golden Chariot Airport, (2010) 10 SCC 422, reiterating the common law doctrine prohibiting approbation and reprobation, which is a facet of the law of estoppel.
(x) Reliance was also placed on the decision of the Himachal Pradesh High Court in Himalayan Corporation (HMC) v. Sub-Divisional Magistrate & Ors., 2019 SCC OnLine HP 2699, in support of the principle underlying Order II Rule 2 of CPC, which was held to be applicable to a writ petition.
Submissions on behalf of Plaintiff
4. Mr. Darpan Wadhwa, Senior Counsel for plaintiff, submitted as under, in response:
(i) Section 12 of CPC bars a further suit only when a plaintiff is precluded by rules from instituting a further suit. Section 11 of CPC, if read in conjunction, bars a suit only when the issues in a suit have been directly and substantially in issue in the former suit and have also been heard and finally decided by such Court. Considering that the order of 16th November, 2017 in the previous suit was not a final decision by the Court, it would not pass muster of Section 11. For this, he also adverted to Explanation VIII of Section 11 of CPC. Res judicata, according to him, applied when three conditions were satisfied i.e. matter directly and substantially in issue was also directly and substantially in issue in the former suit, the former suit was between the same parties, and the issues have been finally decided in the former suit.
(ii) There is no express prohibition of law barring the present suit. Reliance on general principles under Order II Rule 2 of CPC cannot preclude plaintiff nor would it apply in the present case, since it is not about a truncated set of reliefs.
(iii) Section 9 of CPC permits a plaintiff to institute any suit as long as there exists a cause of action. Cause of action, pursuant to the disposal of the previous suit on 16th November, 2017, arose as defendant had far expanded their business, evident from the order dated 27th May, 2022, and is currently running 41 restaurants. Cause of action, therefore, arose due to the vast expansion of business which was subsequent to the order dated 16th November, 2017 in the previous suit.
(iv) Plaintiff was granted an injunction in their favor by order dated 27th May, 2022 after the Court considered and took note of all the prior facts relating to the cancellation petition and the order dated 16th November, 2017.
(v) Merely because of summary disposal of the previous suit vide order dated 16th November, 2017, defendant cannot have a carte blanche to keep expanding their business to plaintiff’s detriment. Plaintiff cannot be remediless despite having adopted their mark in 1913, and with registrations in their favour.
(vi) Reliance was placed on Bengal Waterproof Ltd. v. Bombay Waterproof Mfg. Co., (1997) 1 SCC 99, which held that plaintiff’s grievance therein was regarding continuous acts of infringement and continuous passing off on part of defendant subsequent to the filing of a previous suit and, therefore, fresh cause of action would accrue in favour of plaintiff.
(vii) Reliance was placed on the decision of the Hon’ble Supreme Court in Srihari Hanumandas Totala v. Hemant Vithal Kamat, (2021) 9 SCC 99, wherein principles for deciding an application under Order VII Rule 11(d) of CPC are summarized. It was submitted that, in an application under Order VII Rule 11, only averments with the plaint will have to be referred and defence of defendant must not be considered.
(viii) Reliance was placed on para 30, 31, 32 and 35 of the plaint in the present suit where it has been stated that there is continuous loss to plaintiff on a day-to-day basis as defendant was threatening to expand its business. Order dated 16th November, 2017 disposed of the previous suit in the hope that the cancellation petition would be considered. However, plaintiff could not be remediless due to the long pendency of the cancellation petition.
(ix) Even otherwise, the order dated 16th November, 2017 in the previous suit does not finally dispose of the petition post adjudication but gives liberty to plaintiff to revert and, therefore, there was no final closure in the previous suit.
5. Mr. Rajshekhar Rao, Senior Counsel for defendant, in rejoinder, distinguished Bengal Waterproof Ltd. (supra) to state that there was no subsequent cause of action but plaintiff had already pleaded a continuing cause of action in the previous suit and, therefore, it was not a situation akin to a cause of action which was determined prior to filing of the previous suit and then an absolutely new cause of action arose thereafter [as contemplated in para 10 of Bengal Waterproof Ltd. (supra)]. For this, Mr. Rao, Senior Counsel, relied upon para 31 of the previous suit.
Analysis and Conclusion
6. Having considered the submissions of the parties, this Court is of the opinion that the issue of rejection of plaint under Order VII Rule 11 of CPC, which was raised as a concern by the Predecessor Bench of this Court, cannot be decided in favour of defendant and the present suit must subsist, for inter alia the following reasons:
(i) It is evident from order dated 16th November, 2017, in the previous suit that the Court exercised its discretion to dispose it of in light of the fact that there had been repeated adjournments due to pendency of proceedings before IPAB, Mumbai. Therefore, the court considered it prudent to await the finality of the issue of cancellation.
(ii) It is underscored and highlighted that the Court in the said order noted that “the rights and contentions of all parties are left open” and that plaintiff was granted liberty “to file an appropriate proceeding after the IPAB had disposed of the proceeding for Cancellation of the defendant’s mark and the said order…attained finality.” The liberty, at that stage, was given on the bona fide assumption that the cancellation petition before IPAB, Mumbai, would be disposed of expeditiously, but that was not to be so. Proceedings before the IPAB, Mumbai, were transferred to the High Court of Bombay post abolition of the IPAB in 2021, and the High Court gave no indication as to the time frame in which the cancellation petition would be adjudicated. Faced with this conundrum, plaintiff used the liberty granted by the Court, albeit before the cancellation proceedings concluded, and filed the present suit.
(iii) The principle of res judicata, as contained in Section 11 of CPC, would certainly not apply to the present suit, considering that there was no finality in the previous suit vide order dated 16th November, 2017. The very fact that the Court had mentioned that rights and contentions of the parties would remain open, is itself a determinative indication that there was no final conclusion. Section 11 of CPC would, therefore, not stand in the way as has been also noted by the Hon’ble Supreme Court in Srihari Hanumandas Totala (supra) in the following terms:
“25. On a perusal of the above authorities, the guiding principles for deciding an application under Order 7 Rule 11(d) can be summarised as follows:
25.1. To reject a plaint on the ground that the suit is barred by any law, only the averments in the plaint will have to be referred to.
25.2. The defence made by the defendant in the suit must not be considered while deciding the merits of the application.
25.3. To determine whether a suit is barred by res judicata, it is necessary that (i) the “previous suit” is decided, (ii) the issues in the subsequent suit were directly and substantially in issue in the former suit; (iii) the former suit was between the same parties or parties through whom they claim, litigating under the same title; and (iv) that these issues were adjudicated and finally decided by a court competent to try the subsequent suit.
25.4. Since an adjudication of the plea of res judicata requires consideration of the pleadings, issues and decision in the “previous suit”, such a plea will be beyond the scope of Order 7 Rule 11(d), where only the statements in the plaint will have to be perused.”
(emphasis added)
(iv) Principles governing Order II Rule 2 of CPC, even though nudged by Senior Counsel for defendant, would be ex facie inapplicable. It is nobody’s case that the whole cause of action was not stated in the previous suit and that another part of the cause of action was being raised subsequently. The facts and circumstances, as noted above, do not merit a prohibition under Order II Rule 2 of CPC of a subsequent suit. What would have to be seen is whether there was a subsequent cause of action which necessitated plaintiff to file the present suit.
(v) As regards the subsequent cause of action, this Court has already noted in order dated 27th May, 2022, as substantiated by the affidavit filed by defendant, that the defendant is currently operating 40 restaurants under the name ‘KAREEM’S’. This was obviously to the detriment of plaintiff’s claim. Such vast expansion of business, in a mark which was claimed to be deceptively similar, naturally propelled plaintiff to file a new suit in order to obviate the 16th November, 2017 disposal.
(vi) In the opinion of this Court, subsequent events of purported continuing action of passing off would give plaintiff a cause of action. The mere mention in the previous suit of continuing cause of action would not be relevant for the reason that the previous suit culminated in a disposal without determination of the rights and contentions of the parties. Plaintiff cannot be remediless in the situation since the absence of final adjudication of the cancellation petition by the Bombay High Court cannot work to their disadvantage. It, therefore, becomes the duty of the Court to provide a remedy to the party claiming, which has suffered a situation of the kind that has arisen herein.
(vii) Reliance of Senior Counsel for defendant on Bhargavi Constructions (supra) does not appeal to us for the reason that the inclusion of judicial decisions as “law” under Order VII Rule 11(d) of CPC may not be attracted in these circumstances. No law was laid down by the order dated 16th November, 2017 in the previous suit. It was merely a summary disposal keeping all rights and contentions of parties open, and relegating the parties to determination at a subsequent date.
(viii) In fact, the Hon’ble Supreme Court’s decision in Bengal Waterproof Ltd. (supra) is more instructive in regard to the issue of subsequent cause of action. The Hon’ble Supreme Court, in para 10, observed the following:
“10. …..
In the second suit, namely, the present suit the grievance is not based on any acts of infringement or passing off alleged to have been committed by the defendants in 1980 but plaintiff’s grievance is regarding the continuous acts of infringement of its trade mark ‘DUCK BACK’ and the continuous passing off action on the part of the defendants subsequent to the filing of the earlier suit and which had continued on the date of the second suit of 1982.
……
The cause of action for filing this present second suit is the continuous and recurring infringement of plaintiff’s trade mark by the defendants continuously till the filing of the present second suit.”
(emphasis added)
(ix) Most importantly, in the previous suit, the Court on 16th November, 2017, did give liberty to plaintiff to pursue their remedy after the cancellation petition was finally adjudicated, and it is in this circumstance that plaintiff cannot be left remediless and, in an indefinite, uncertain, and indeterminate situation. Holding in favour of defendant on the issue of rejection of plaint under Order VII Rule 11 of CPC would mean that plaintiff is caught in an inextricable bind. In that, neither can it institute a new suit to assert its proprietorship in the mark it claims from 1913 nor can it prevail upon the High Court of Bombay to give a time determined adjudication in the cancellation petition. It cannot also easily seek review/clarification of the order dated 16th November, 2017 passed five years back in the previous suit. These circumstances, possibly, also appealed to this Court when it passed the order of 27th May, 2022.
(x) In fact, apropos order dated 27th May, 2022, circumstances of the previous suit were indeed noted by the Court and the injunction was prefaced on the finding of this Court in the following terms:
“considering the fact that plaintiff is prior user, adopter and owner of the marks “KARIM/KARIM’S/KAREEM” continued use of the said mark by defendant would result in passing off in deception”.
If defendant had an issue with the said injunction granted on 27th May, 2022, they would have challenged this order in appeal, which they did not do and, therefore, the said finding, even though prima facie, will accrue to plaintiff’s advantage.
7. Accordingly, the issue of rejection of plaint under Order VII Rule 11 of CPC is decided in favour of plaintiff and against defendant, and the suit as instituted shall subsist.
I.A. 2695/2022 (application under Order XXXIX Rules 1 and 2 of CPC)
8. List on 12th July, 2024.
9. Order be uploaded on the website of this Court.

(ANISH DAYAL)
JUDGE
FEBRUARY 06 MARCH, 2024/MK

CS(COMM) 112/2022